{"id":51776,"date":"2018-07-18T06:25:25","date_gmt":"2018-07-18T10:25:25","guid":{"rendered":"https:\/\/huntsville.dopperonline.ca\/?p=51776"},"modified":"2018-07-18T14:46:30","modified_gmt":"2018-07-18T18:46:30","slug":"mahc-pushes-for-an-increase-to-its-base-funding-while-looking-for-other-efficiencies","status":"publish","type":"post","link":"https:\/\/doppleronline.ca\/huntsville\/mahc-pushes-for-an-increase-to-its-base-funding-while-looking-for-other-efficiencies\/","title":{"rendered":"MAHC pushes for an increase to its base funding while looking for other efficiencies"},"content":{"rendered":"

Main photo: A handful of community members along with MAHC volunteers, staff, board members and North Simcoe Muskoka Local Health Integration Network representatives gathered in the board room at Huntsville hospital on Monday to hear a presentation about the province’s complex funding formula.<\/em><\/p>\n

The need to centralize certain hospital procedures and services once offered at both the Huntsville and Bracebridge sites may be an inevitable result of the Province\u2019s complex funding formula.<\/p>\n

Speaking at a public meeting Monday, held to explain the province’s funding formula and Muskoka Algonquin Healthcare\u2019s financial position going into its 2018\/2019 fiscal year, MAHC CEO Natalie Bubela said that by centralizing services such as cataract surgery, the organization was not only able to achieve savings, but make room for a new service, gynecological surgery, which also resulted in more funding.<\/p>\n

According to the organization\u2019s incoming CFO Terry Shields, the Province was funding cataract surgeries at a rate of about $500 per procedure, while it was costing MAHC an average of about $850 per procedure. \u201cSo every case that we did we lost about $350,\u201d he said, which meant pulling from other resources. As a result of centralizing the service at one site and working with suppliers to keep the cost down, MAHC is now able to provide cataract surgeries at a lower cost than the funding it gets for the same.<\/p>\n

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A handful of community members who attended the meeting also heard that hospitals, particularly medium-sized hospitals that don\u2019t see the type of volumes their counterparts do in the GTA, are having to get creative under the Province\u2019s new funding formula\u2014one which no longer simply provides global funding but a three-pronged approach. The formula, which began to take root in 2012, is comprised of base funding, which currently represents about 61 per cent of the total amount Muskoka Algonquin Healthcare (MAHC) will receives from the Province, thanks to persistent lobbying from senior staff and the board. There\u2019s also a Health Based Allocation Methodology, which involves things like demographics, catchment areas and services offered. That makes up about 30 per cent of the money MAHC gets from the Province. Then there\u2019s the standardized Quality Based Procedures, for which hospitals get a set amount. Those procedures represent about nine per cent of MAHC\u2019s provincial funding.<\/p>\n

There are 23 Quality Based Procedures on the list and MAHC participates in nine of them, including cataract surgery.<\/p>\n

\u201cThe larger hospitals will do all of those types of QBPs (Quality Based Procedures) and get incremental funding associated with that,\u201d said Shields, but you have to have enough volume to be efficient at it. \u201cLike the cataract story, we were able to lower the cost and be effective at it, but if you do not have enough volume, you\u2019re going to lose your money. You\u2019re going to lose and end up in a hole.\u201d<\/p>\n

While on the one hand the Province\u2019s formula forces hospitals to become more efficient, on the other, a perhaps unintended consequence, hospitals are being set up to compete against each other for a piece of the funding pie, said Shields. And because the funding formula relies heavily on volume, it presents problems for the Huntsville and Bracebridge hospitals, particularly when it comes to staffing.<\/p>\n

\u201cThe assumption is that you are able to staff your operation relative to the volume that you have,\u201d he said. \u201cHowever, what the funding formula doesn\u2019t recognize is minimum standards. If you go to run an ED (Emergency Department) at night time, you have to have three nurses.\u201d<\/p>\n

Bubela elaborated further on the issue and said the hospitals\u2019 ER departments, as an example, require a minimum of three nurses per shift, although the volumes don\u2019t necessarily support that. To the contrary, if there were only two nurses per shift and one were to be off on break while a patient came in with a heart attack, it would be impossible for one nurse to look after that patient and the rest of the patients in the ER, she said.<\/p>\n

\u201cIt\u2019s one of the things that I\u2019ve sometimes said in the past, which people have assumed is my trigger for a one-hospital model. It\u2019s that if the two sites were combined, and I use the Emerg (Emergency Department) as an example, we could staff for three nurses, maybe four, but we\u2019ve got three and three at each site so right away we would automatically require two less, which is a cost saving and it\u2019s more efficient. You\u2019re still providing safe quality care but you don\u2019t require the same human resource element there.<\/p>\n

“As soon as you operate two sites which is the argument that we\u2019re putting forward to the Ministry, is we have a structural challenge here because our volumes don\u2019t desaturate the staffing costs because we have to staff two sites,\u201d said Bubela. She said the same is true for existing MAHC hospital units that have just 15 beds, which are not an optimal number for staffing purposes. \u201cWhen you\u2019re down at 15 I still have to have two or three staff on, but if you had a larger unit you wouldn\u2019t need that many per patient. So our issue structurally here is the way our buildings are designed, the number of actual beds and the fact that we\u2019ve got two sites.\u201d<\/p>\n

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The funding formula applies to medium and large hospitals, while small hospitals are exempt and receive global funding. Bubela said the province has generally increased global funding for small hospitals by about one or two per cent annualy to keep them running, \u201cwhereas we have been frozen for years without getting a lot of extra increases, I mean we\u2019ve received some funding in order to be able to balance but there was not traditionally an increase to funding for medium and large hospitals over the years,\u201d she said.<\/p>\n

Huntsville Councillor Bob Stone, who attended the meeting, asked whether the two hospitals could be deamalgamated into two separate sites, thereby classing them as small hospitals. Shields said the cost would go up with the requirement of two separate administrations and there would also be additional costs associated with separate reporting. \u201cAnd more importantly than that, the hospital is actually receiving more funding than what we would receive from being a small hospital\u2026 so from a financial standpoint, we\u2019re in a better situation than we would\u2019ve been separately.\u201d<\/p>\n

MAHC Board Chair Phil Mathews said the funding formula is a volume-based exercise. \u201cThe piece in that formula that was there to cover overheads or fixed costs is fine if you have the volume that throws it out in large amounts of dollars, but in our case it\u2019s throwing it out in very small amounts of dollars and it\u2019s not enough to cover the base that we have and the overhead we have. By getting all of this work done to get that base (funding) up to 61 per cent and hopefully up to 65 per cent, we should cover all of our budgets going forward\u2014that\u2019s the exercise we\u2019re in right now,\u201d he said of the way the Province funds MAHC. He said the organization does not want one-time funding to help it balance its books, but an increase do its annual base funding, which it continues to lobby for.<\/p>\n

\u201cJust so you know, yes we\u2019ve balanced the annual budget this past year but we have an accumulative deficit on our balance sheet of about $12.2 million, which is the funding that the government is really behind (on) and in terms of working capital the difference between our current assets and our current liabilities, we have a working capital deficit of about $9 million.\u201d<\/p>\n

Bubela said the organization relies on an $8 million line of credit from the bank in order to ensure that MAHC is able to meet payroll and other obligations throughout the year because at times there isn\u2019t enough cash flow and it can\u2019t count on one-time funding from the Ministry until it gets proper notification.<\/p>\n

\u201cIt\u2019s an interesting way to manage a hospital, but I would say it\u2019s not unique to us. This has been repeated throughout Ontario,\u201d she said. \u201cI know our board sometimes struggles with that because they think \u2018how can you run a system like this in that way,\u2019 but we\u2019re used to it.\u201d<\/p>\n

The organization is projecting $82 million in operating expenses and $79.5 million in operating revenue for 2018-19, leaving it with an anticipated operating deficit of $2.5 million on top of the $2.45 million in additional funding that it has been promised by the province.<\/p>\n

Much of the deficit is being attributed to things like increases to collective agreements related to staff salaries, new workplace legislation and increases to the cost of utilities, pharmaceuticals and other supplies as well as higher occupancy rates than those it was funded for, which resulted in additional costs, explained Bubela.<\/p>\n

Eighty-five per cent of MAHC\u2019s revenue comes from the Ministry of Health, while the remainder comes from things like out-patient diagnostics, parking (about $600,000 from both sites), and co-payments for out-of-province patients, semi-private accommodations and the leasing of space for physio services.<\/p>\n

Hospitals do not receive capital funding for things like beds, bed-side tables stretchers and medical equipment. They can apply for funds for specific capital needs like roof or elevator repairs, but they mostly depend on funding from the community through the hospital auxiliaries and foundations.<\/p>\n

Bubela said MAHC has identified about $39 million in infrastructure needs and another $9 million in capital needs.<\/p>\n

\u201cPeople are getting mixed up a little bit. I have heard from some individuals in the communities \u2018I\u2019m not going to donate to the hospital until I know what the model is and then I\u2019ll start to give.\u2019 Well those models are only being looked at to come to fruition, you know 15 years or so from now,\u201d she said, adding that funding from the community is key in order to support current hospital operations.<\/p>\n

The task force studying the various future hospital models is expected to make its recommendation at the beginning of August.<\/p>\n

Don\u2019t miss out on Doppler! Sign up for our free newsletter here<\/u>.<\/a><\/strong><\/p>\n

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 <\/p>\n","protected":false},"excerpt":{"rendered":"

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